Fewer Portland landlords are registering their rental units with the city and paying a fee intended to fund a housing safety program created in the wake of the deadly Noyes Street fire that killed six young people in 2014.
The number of rental properties registered with the city dropped nearly 20 percent and the number of rental units by 14 percent from 2016 to 2017, according to city data.
City officials also have yet to use an enforcement provision in the ordinance allowing it to fine non-compliant landlords up to $100 a day, although that could soon change.
The lack of enforcement is prompting some landlords who have been paying their fees to cry foul.
“That was a huge concern – that the good landlords would be complying and paying and the bad ones would not and get off scot-free,” said Brit Vitalius, president of the Southern Maine Landlord Association. “And we wanted this program to handle the bad landlords. That was one of the reasons we supported the high punitive fines, because we wanted to make sure everyone (paid the fee).”
Despite fewer units being registered, the city appears to still be collecting more revenue from rental registration fees than it costs to operate the Housing Safety Office, prompting some to call for an audit of the program.
“I think the program is slipping badly,” said Carleton Winslow, who has been a landlord for 46 years and owns 21 rental units. “I’d like to know where all that money is.”
Michael Russell, director of permitting and inspections, said the city has not issued – or even threatened – fines against landlords who are not registering their units because they have been trying to get people to comply voluntarily. Fines can lead to a sometimes lengthy legal process, he said.
Russell said the city has sent several notices to landlords reminding them to register their units or risk fines.
“That’s our last option,” he said of potential fines. “I think that’s probably where we’re at now.”
SOME LANDLORDS NOT COMPLYING
Landlords are required to register their rental units by Jan. 1 every year. If a property is sold, the new owner has 30 days to register.
Those who are not registering their units range from small landlords with a single rental to professional property management companies with hundreds.
For example, Geoffrey Rice did not register 329 rental units in 2017 that were previously registered in 2016, according to city records. And Russell confirmed that Rice has not registered any of those units this year, either.
That would be about $11,500 a year in registration fees, without accounting for discounts.
Russell said the city is working with Rice on other “legal matters” pertaining to code and safety violations at 126 Danforth St. The city entered into a consent decree with Rice in December, requiring him to address those issues or pay $40,600 in fines.
Russell said registration fees for the property, as well as others, have not been part of these conversations so far. But he said the city would be reaching out to Rice’s attorney to discuss the fees.
“I think we treat all of the violations seriously,” Russell said. “We prioritize going after the life safety violations. Certainly the rental registrations are an important part. We’re certainly going to have to be more aggressive with fines for people who don’t register.”
Rice did not respond to a message left at his office or to an email seeking comment.
Other landlords who have not registered their units in the past two years include Auburn Terrace LLC, which owns 164 units at 246 Auburn St.
As of Feb. 27, some of the larger landlords who have not registered this year include Port Property Management (227 units), Bricklight Properties LLC (151 units) and Weston Associates Inc. (108 units).
Only an attorney representing Bricklight Properties responded to an email seeking comment Friday afternoon.
“The failure to renew these registrations by the regular due date was an accident attributable to recent staff changes at the management company,” attorney Nathaniel Huckel-Bauer said in an email. “The registrations have now been renewed, with all fees paid, and a plan is in place to assure they are renewed timely in the future.”
MORE REVENUE STILL COMING IN DESPITE FEWER INSPECTIONS
The Housing Safety Office was created in 2015, a year after a massive fire tore through a duplex at 20 Noyes St., killing six young people. The fire exposed a gap in the city’s inspection program, which only applied to buildings with three or more units.
The city formed a task force to look into the issue, which recommended creating a new program with additional inspectors to ensure that all rental properties are inspected.
The program is funded by requiring landlords to pay a $35-per-unit fee, which could drop to as low as $15 per unit depending on safety features. The registry also gives the city and residents more information about who owns and manages the properties.
In 2016, the first year of the program, landlords registered 4,767 rental properties totaling 18,234 units. But the next year, only 3,910 rental properties totaling 15,664 units were registered. Russell said the city is on pace to match last year’s total number of registrations.
For inspections, the city conducted 767 in fiscal year 2016, 3,025 in fiscal 2017 and 2,674 so far this year, he said.
The safety office was budgeted for $331,000 in its first year, but only cost about $234,000, according to city budget documents. Meanwhile, the city took in nearly $442,000 that year in registration fees, Russell said.
The next year, 2017, the safety office cost the city about $320,000 and brought in more than $480,000.
It’s unclear why the city took in more revenue in 2017 when fewer units were registered. Russell said it could be that fewer landlords applied for discounts, but he couldn’t say for sure without looking at the supporting documentation for each registration.
This fiscal year, which ends June 30, the city budgeted only $251,000 in costs for the office and $541,000 in revenue.
The office was reorganized in March 2017, leading to the elimination of the housing safety director, and folded into a new Permitting and Inspections Department. It includes five people – four certified code enforcement officers and a permit/inspections support service specialist, according to the budget book.
Russell said that through March 6, the city had collected $326,000 in registration fees, plus an additional $88,000 in new fees for short-term rentals, money that also goes to the Housing Safety Office. He pushed back against the assertion that the program was producing a six-figure surplus, saying that the line item in the budget doesn’t necessarily reflect the true cost of the program.
“There are quite a few people involved in the administration of it,” he said. “There’s definitely more costs than is represented in that.”
When the office was first created, city officials said they would be open to revisiting the fee structure if revenue exceeded costs. But Russell said the $35 per-unit fee is appropriate for the services being provided.
“It’s a pretty moderate fee,” he said.
Randy Billings can be contacted at 791-6346 or at:
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